Monday, April 15, 2013

Congratulations to Australia’s Adam Scott on winning that
quintessential American golf tournament, although we were pulling for the
Argentine old boy at the end. We want to
use the occasion to take a look at today’s 11th place iShares MSCI
Australia Index Fund (EWA)
which has been a persistent top 100 fund since our inception last summer. If you take a look at its price chart since
then you will see why.

November saw the fund in the top 10 on 7 days including 6th
place on November 14th when we wrote about Quant’s aversion to the
USA. It was among the leaders of that
great run in foreign markets last fall. Even when our models began to turn their gaze
back to the US in December, EWA has always remained in the top 100 and most of
the time in the top 50 since then. Traders
could have interpreted its 83rd place rank on December 24th
as a sell signal but longer term investors would probably be satisfied with its
close to 9% gain so far in 2013. We don’t
state sell signals because different investors have different objectives and
our models are relevant to any of them.
EWA got back into the top 10 on January 30th and again on a
handful of days in mid to late February.
March only saw one top 10 day when it reached 8th place on
March 6th but it stayed in the top 50 all month, although April has been
more volatile thus far with an 84th place rank on April 8th. That was somewhat of an outlier and it got
back to 12th place the next day and 4th place last
Wednesday.

Following those rankings with the fund’s price action will give
you a sense of how Quant and its sister Green Diamond Reward models work. They won’t call every wiggle and every one of
their wiggles isn’t necessarily actionable but it only takes a few days to get
a good feel for a given fund’s prospects in the coming months. If you would like some historical data on a
fund you are looking at please let us know at support@etfg.com,
we are here to help. Following our
models takes less commitment than golf and will help you a lot more than an
anchored putter. But that’s not to take
anything away from Adam Scott’s remarkable 25 footer in the rain.